Svetlana Balashova

This paper presents an empirical examination of the relationship between the quantitative characteristics of national innovative capacity and the key indicator of innovation activity – patent activity. The theoretical basis of this study is Paul Romer’s model of the new knowledge production and the concept of national innovative capacity by Michael Porter and Scott Stern. Empirical assessment is carried out using econometric tools for panel data. It is shown that the estimates of the model parameters have changed significantly over the past 15 years: the total stock of knowledge held by the country cannot be considered the major driver of innovation activity nowadays. The total level of capital (physical and human) deposited in the knowledge sector of the economy is the key point. The quality characteristics of national innovative capacity such as the level of intellectual property protection, business involvement in the production of new knowledge, the integration of science and education have a significant impact also.